Unemployment Benefits Frozen Due To Being A Fraud Victim? Here's What To Do

(Chava Sanchez/LAist)

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Sandra Roberts had no idea that anything was wrong with her unemployment benefits until she tried to pay for an iced coffee at McDonald's.

The cashier swiped her Bank of America debit card, then handed it back to her, saying it had been declined.

"That's how I found out that my account had been shut down," she said.

Roberts, an unemployed rideshare driver and house cleaner in the city of Orange, had her claim suspended along with approximately 693,000 others as part of a recent fraud prevention effort carried out by the state's Employment Development Department (EDD).

But Roberts hadn't committed fraud. She was actually a victim of fraud. Lately, dozens of EDD envelopes addressed to strangers have been flooding her mailbox. Someone had apparently used her address to file bogus claims for unemployment benefits.

"I didn't know how it was happening or what was going on," she said. "But I knew that it wasn't right."

FRAUD VICTIMS PUNISHED FIRST, VERIFIED LATER

Thousands of unemployed Californians have now been put in similar situations, scrambling to verify their identity with EDD so they can start receiving much-needed benefits again.

The state's approach to rooting out fraud "punishes first and asks for evidence later," said Daniela Urban, director of the Center for Workers' Rights in Sacramento.

She said EDD's actions go against the recommendations of a recent strike team report, which found the department focused too heavily on fraud at the expense of clearing a backlog that now stands at about 1.2 million claims.

"This is a whole new category of people who were already getting benefits appropriately, who now have to go through an identity verification process or have to communicate in some way with EDD or Bank of America in order to get the benefits," Urban said.

It's unclear how many of the 693,000 frozen claims were legitimate. But EDD reported earlier this month that 29,000 claimants in this group have already provided documents to verify their identity, suggesting that many people receiving benefits properly had been cut off.

EDD representatives say the department has reached out to others via email, text and physical mail in an effort to confirm their identity.

"Payments will be reestablished quickly for claimants verified to be legitimate and accounting will be done to clear them from any connection to a possible fraudulent claim initiated in their name or involving their address," the EDD said in an Oct. 15 press release.

LOCKED OUT ... AND NOT SURE HOW TO GET BACK IN

However, some Californians with blocked accounts say they never received word from EDD on how to fix the problem.

Sandra Roberts still hasn't been able to restart her claim after EDD froze her account without warning in late September. As a result, she's fallen into a deep financial hole.

Previously, she'd been using her $167-per-week benefits for gas to drive to medical appointments, and to cover her out-of-pocket costs for diabetic supplies. But now, Roberts is relying on a friend for food and a place to stay.

"Aside from not knowing how to make it from day to day, it's infuriating that I feel like my good name is being slandered," Roberts said.

Legal advocates say their clients are dealing with this problem throughout the state, with some unable to buy groceries after finding out their accounts have been frozen. Similar stories have been reported by CalMatters and Sacramento NBC affiliate KCRA. So what should you do if you find yourself in this situation?

TIPS FOR UNFREEZING YOUR ACCOUNT

First, you can try to avoid having your account frozen in the first place by immediately reporting any suspicious mail coming to your address. Proactively reporting fraud attempts linked with your address could prevent EDD from cutting you off. EDD's website contains more information on how to report fraud.

But if your benefits have already been frozen, there are still a few steps you can take. Daniela Urban with the Center for Workers' Rights recommends quickly responding to any communication you get from EDD asking you to provide documents that verify your identity.

But Urban said some people aren't receiving communication from EDD, and others have found they can't upload documents to the department's online verification system. In those cases, you may have to try other methods, such as reaching out to legal aid organizations specializing in California's unemployment system, including Legal Aid At Work and the Legal Aid Foundation of Los Angeles.

Or you can try contacting your state representative for help cutting through EDD's bureaucracy. That's what Sandra Roberts did. This week, her assemblyman's office was able to connect her with an EDD specialist — a step she was never able to complete on her own through multiple calls per day. The problem still isn't resolved, but she feels closer to figuring it out.

"I did nothing to deserve this," she said. "Why weren't these issues already addressed?"